BookRenter competes for huge textbook market
First year Northwestern University medical students review pages in a textbook as instructor Doctor Sudha Rao (bottom) talks about the human vagina for a pelvic exam on rubber dummies during their human anatomy class in Chicago, Illinois March 15, 2007.
Credit: Reuters/Joshua Lott
SAN FRANCISCO (Private Equity Week) - Bookrenter.com, a textbook rental website that competes against heavily funded Chegg.com, raised $10 million in venture funding last week.
The funding was the second round of financing for the company, which previously raised $6 million in a first round.
Chegg, BookRenter's main rival, has collected $144 million in cash and debt financing from Kleiner Perkins Caufield & Byers, Foundation Capital and Insight Venture Partners. The two sites have the same premise, but operate differently. Chegg leases books from its own warehouse, while BookRenter works with bookselling sites.
Unlike Chegg, which competes against college bookstores, BookRenter thinks it can capture more market share by working with the universities. Since launching the platform in April, 75 schools nationwide, including the University of Texas at Austin and the University of San Diego, have created their own online rental stores using BookRenter, and BookRenter is predicting that hundreds more will be up and running by the fall term.
"The college textbook market is about a $9 billion market, and right now, collectively, all of the startups selling books for rent are doing about $200 million in revenue," CEO Mehdi Maghsoodnia told Thomson Reuters online affiliate peHUB.com.
Maghsoodnia estimated that Chegg is reporting about $100 million in revenue, while his site is doing about a fourth of that. "Collectively, the rental space is still very small," he said. "It's the beginning of the game."
The startup was one of several early tech companies to secure venture funding recently. Other startups to raise capital in the last week include the following:
CONSUMER INTERNET
BookRenter
Santa Clara, CA
Amount/Round: $10 million/Series B
Investors: Norwest Venture Partners (led), Storm Ventures and Adams Capital Management
Details: Operates an online platform for renting textbooks. The company previously raised $6 million. Sergio Monsalve, from Norwest Venture Partners, has joined the board. The board also includes Marc Randolph, founder of Netflix.
GAMING
BigDoor Media Inc.
Seattle, WA
Amount/Round: $5 million/Series B
Investors: Foundry Group
Details: Develops a platform that powers game-like mechanics and loyalty programs for website publishers. Brad Feld, a managing director of Foundry Group, has joined the board. The company had previously raised about $715,000 from angel investors.
INTERNET MARKETING
Burstly
San Francisco, CA
Amount/Round: NA/Series A
Investors: SoftBank Capital and Founder Collective
Details: Provides a mobile ad platform. The funding is an expansion of the Series A round, which previously included $1.8 million from Rincon Venture Partners and GRP Partners.
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Martini Media Network
San Francisco, CA
Amount/Round: $6 million/Series B
Investors: Reed Elsevier Ventures (led), Granite Ventures and Venrock
Details: Provides an online ad network focused on affluent individuals. Kevin Brown, partner at Reed Elsevier Ventures, and Chris McKay, managing director at Granite Ventures, have joined the board, which includes Greg Coleman, president and chief revenue officer of The Huffington Post.
SECURITY
Truste
San Francisco, CA
Amount/Round: $12 million/Series B
Investors: Jafco Ventures (led), DAG Ventures, Accel Partners and Baseline Ventures
Details: Provides privacy certificates for online sites. The company previously raised a $10 million Series A round. Jeb Miller of Jafco sits on Truste's board with Andrew Braccia and Theresia Gouw Ranzetta of Accel Partners.
SOFTWARE
Etouches
Ridgefield, CN
Amount/Round: NA/Series A
Investors: Greycroft Partners (led), Connecticut Innovations and Cava Capital
Details: Develops online event management and registration software.
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OneRoof Inc.
San Francisco, CA
Amount/Round: $3.4 million/Series A
Investors: NA
Details: Develops cyber cafe management software.
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